As Trump and Xi meet, investors play both sides of AI divide

The United States and China are in a fierce competition to establish independent artificial intelligence supply chains, leading investors to allocate funds on both sides of the AI divide. U.S. financial institutions are actively raising capital for Chinese AI startups, while Chinese funds are pouring into U.S. tech companies. The importance of this situation cannot be overstated, as Wall Street banks have played a crucial role in facilitating 19 Chinese high-tech equity capital market deals valued at $17.2 billion this year, making up nearly 30% of the sector's total issuance, according to LSEG data.

Furthermore, U.S. stocks, especially semiconductors, have become the top choice for China's outbound mutual funds. The influx of U.S. equity into Hong Kong and mainland China has surged by 23% in the past year, reaching over $750 billion, as reported by U.S. data.